I talk often in this blog about the difficulties that local restaurants have in staying open in the four-state area.  Truth be told, the restaurant business is one of the toughest out there – no matter what the address, and most people just don’t realize what it takes to not only make a great restaurant, but what it requires day in and day out for it to remain successful.

I can’t tell you the amount of times I’ve heard people say “oh, I’d love to own an eatery – it would be so much fun”.  Talk to anyone who works in the food and beverage industry and I can almost guarantee you that the word “fun” is probably one of the last adjectives you will hear them use when referring to their work.

“Everybody loves my chili.  I could make a fortune!”

Sorry, Randy.  Actually, odds are – you probably won’t.

Let’s take a few minutes and break down some of the many challenges and pitfalls of owning a restaurant.

 

Concept is King

What’s the idea behind the restaurant?  Is it unique?  Is it scalable?  Look, Uncle George may make a mean hamburger on Memorial Day weekend, but can he do it 200 times a day, 6 days a week – and do it the same way every time?  Sure, anyone can open a pizza joint, but can that pizza place compete with the big carry-out chains on price?  What makes this pizza parlor different (and do we really need another one)?  Is it something new and exciting (yet approachable)?  As an owner, one has to really know their market and their target audience.  Bolivian goat might be quite tasty, but I seriously doubt that it can sustain a restaurant as its signature dish for very long.

 

Show Me The Money

Whether it’s the dream of opening a franchise of an established chain or starting up an original concept, it takes a ton of money to get started.  There’s real estate to buy (or rent), equipment to purchase, permits and inspections to pass, and employees to train.  It will take some sizeable bank loans and/or generous investors to get up and running – and all with no promise of success.  There’s a very good chance that the business venture will lose every single dime that is put into the place.  Seriously.  Statistically speaking, over 60% of all new restaurants fail in the first year, and 80% don’t see their fifth birthday.[1]  Even if the concept is a success, it will take a long time before the financial books are showing a profit.  That’s the stark reality of the food business.  I have a cousin who’s been the head chef for a successful eatery in West Virginia for the past twenty years.  Every time I say “ever think about opening your own place?” – he literally laughs in my face.

 

Location, Location, Location

Where is this new food nirvana located?  Is the location easy to get to, easy to see, and easy to describe to other people?  “We’re in front of the mall” is a lot more appealing than “I’m down the alley behind the sewage treatment plant”.  Don’t get me wrong, if the food is good, people might find you (even down the alley), but it will take a lot longer to build and establish a clientele.  Time the owner probably won’t have due to the “Show Me the Money” rule (see above).

People Are Fickle

On the whole, customers are an unpredictable, unsatisfied, and skittish lot.  A new restaurant may be basking in the glow of an excellent review one moment, and the next its being torn apart by a disgruntled patron on “Yelp”.  Restaurants – like fashion and hairstyles – are very trendy.  “Millenials” may fall in love with the melted avocado stack this month, then unleash their pent up anger and venom on the very same dish next month – like they’ve just seen celebrity chef Guy Fieri at a ‘Nickelback’ concert.  The place will go from “must see” to “ghost town” in the blink of an eye – and once business is lost, it is extremely hard to get it back again.  If that restaurant you love is busy on a Tuesday night (without any $4.99 specials going on), then chances are they are doing something right.

 

I haven’t even brought up the 80-100 hour work weeks, supplier problems, tax codes, HR headaches, and marketing needs of this newfound “fun” business.   All too often, restaurants and their owners are discovering these problems after they open the doors, and by then, it’s generally too late.

Ever watched one of those restaurant/bar “makeover” shows?  Sure, the producers pump a lot of money into the place, seemingly turning it around in just one week.  If you do some research; however, you’ll find that most of the establishments “helped” by these shows still end up going bankrupt and/or out of business.  Why?  Because the owners still know next to nothing about running a restaurant and/or a bar.  The producers have simply put lipstick on a pig.  Deep down, it was still a pig – and in the end, a pig is going to do what it does best.  You can’t teach a failing owner how to turn around their business in just a few days.  Unsupervised, they’ll soon go back to their old habits and still torpedo the place – except now it’s going to close with a new paint job and some clean bar taps.

So, the next time you are out and about looking for that “perfect” dinner or night on the town, take a moment to ponder what it took to even open the doors on your favorite watering hole or eatery.

Do you have a local favorite?  Tell me about it (and why you like it so much) in the comments below!

 

 

[1] “The Number One Thing to Consider Before Opening a Restaurant”, Internet article, https://www.cnbc.com/2016/01/20/heres-the-real-reason-why-most-restaurants-fail.html, accessed 2/18/18